Niftex Allows NFT Investing Through Partial Ownership

Investing bits of money to buy partial ownership in an NFT will soon be possible through the Niftex exchange. This exchange splits ownership over non-fungible tokens into fractions, something they refer to as shards. As a result investors can for example buy 10 percent ownership over a piece of virtual land in Decentraland.

The idea is comparable with stocks, in which investors literally buy a percentage of ownership into a company. Niftex offers the same investing concept, but aimed at individual NFT assets. The first example for Niftex, which is currently still in a closed alpha test, involves a piece of land in Decentraland.

When someone sells an item on Niftex, it will first need to be valuated. Sellers can determine how many shards - or stocks - they want for their digital item. Based on that information the system can determine the price per shard, and then investors can start buying ownership over the asset. For example, the East Genesis Corner Shards (EGCS) represent one piece of land, while Vice City Shards (VCS) represent another piece.

Nitfex has also included the so-named Shotgun Threshold. This means that when an investor acquires a certain percentage of all shards on an asset, he's allowed to make an offer for the outstanding shards. Other parties must accept this offer, or buy the shards from the offering party at that determined price. The one who owns all shards, claims full ownership over an asset.

NFT investing becoming a real thing

Over the past two years non-fungible tokens have taken quite a presence within the blockchain space. A non-fungible token represents ownership over a digital or sometimes physical asset, and therefore has a certain value. The value of certain non-fungible tokens increased a lot, sometimes even adding one or more zeros behind the initial value.

In 2018 a piece of digital art called "AI Generated Nude Portrait #1" was sold for $75.74. However, at the beginning of this year that same blockchain-verified image sold for 12.351 dollars. That's 174 times the original investment!

With virtual land in Cryptovoxels and Decentraland, the same thing happend. While pieces of land originally sold for less than one hundred dollars, some of these lands are now worth thousands of dollars. On a weekly basis users invest around half a million dollars in blockchain-verified digital land. This number sometimes peaks, almost reaching one million dollars in February.

These are considerable amounts of money, inaccessible for most people on this planet. Allowing investors to buy fractions at least opens up the opportunity for the lower segment investors to get a piece of the pie.

NFT portfolio investing

Niftex isn't the only initiative to open NFT investing to a wider audience. An NFT investor who goes by the nickname WhaleShark is tokenizing his own investment portfolio. The creator is backing the WHALE token with some of the most rare and valuable tokenized game assets in the blockchain gaming space.

There will be a maximum of 10 million Whale available. The portfolio holder will make four million available for sale in the next ten years, and one million for partnerships. As a result half of the token’s circulation stays with the house. The project aims to make money through trading assets, accumulating rare assets and lending NFTs to third parties.

Like the housing market

Even though virtual space can't be compared with our actual physical space, these virtual worlds do overlap to some extend. Those with lots of money are able to buy a lot. As a result, many so-called whales own quite a lot of virtual land but they won't be doing anything with it. Somnium Space now allows land owners to rent out their land to other users. As a result others can build and use the parcel.

It's an interesting development, already imagined by many in this space. Similar plans are in the works for Cryptovoxels, Decentraland and The Sandbox. Cryptovoxels is now expanding its world with new islands, while Somnium Space is working towards their second major land sale. The Sandbox is approaching its fourth and final pre-sale, and anybody can sign up to buy a piece of land for 50 dollars or more.

Real money in virtual land

There are critics who believe that virtual land is the next big thing on the internet. For the past months projects like Cryptovoxels, Somnium Space and Decentraland were among the top ones in terms of trading volume. In the past seven days these three projects are responsible for 955 ETH in trading volume. That’s 201 thousand dollars!

This trend hasn’t gone unnoticed in other industries. For example Atari signed up with The Sandbox to build a virtual theme park. Mainstream organizations like Forbes and Nasdaq have covered The Sandbox in recent weeks. Square Enix invested into The Sandbox, while several investment companies have tried to invest into Cryptovoxels.